OC Vendor Revenues Hit New Highs in Q2 2016. Will the Growth Continue?

EUGENE, OR--(Marketwired - September 14, 2016) - LightCounting today released its Quarterly Market Update Report, presenting analysis of the optical communications industry supply chain for the first half of 2016, including the market shares of the leading suppliers of 100G DWDM transport equipment.

LightCounting's Quarterly Sales Database is being released with the report. It includes third and fourth quarter 2016 estimated shipments and prices for more than 100 categories of optical components and modules, along with actual data from Q1 2014 through Q2 2016. More than 20 optical transceiver suppliers contributed to the report.

Revenues of the leading optical component vendors broke the $1.4 billion mark for the first time in Q2 2016, up 27% compared to Q2 2015. A majority of the vendors tracked by LightCounting reported record high revenues, driven by metro 100G in China, ROADM-based flexgrid builds in North America, and unrelenting hyper scale datacenter capacity expansion.

Strong demand for 100G products of all types was a key driver of the sales growth in Q2, with CFP-ACO, CFP-DCO, QSFP28 (CWDM and LR4), CFP2, and CFP4 varieties each cited by one or another vendor as driving their revenue to new heights. Demand for technically mature 10G transceivers (in XFP and SFP+ packages) also showed very strong growth.

"A number of vendors reported being capacity constrained in Q2, so a key question is how long this demand surge will continue," commented John Lively, Principal Analyst at LightCounting. "In the past the component industry has fallen victim to 'pipeline effects', with inventory corrections following demand spikes. Today's tighter coupling between component suppliers and end-customers should lower the likelihood of this recurring or reduce its impact, but it remains a risk."